Shares of Macau casino operators have clawed their way back to the highest level since August 2015 as VIP takings recover. Makers of pricey spirits, which became a symbol for official excess, are trading near multi-year highs. Even Chinese imports of Swiss watches are looking buoyant, jumping 28% in December alone, as demand rebuilds in the wake of the Communist Party’s crackdown on conspicuous spending.

Much of the investor confidence can be attributed to the success of industry efforts to target the mass market, rather than relying on a cashed-up elite. Casinos shifted to courting tourists and building family-friendly facilities in Macau. Kweichow Moutai Co. cut prices of its premium liquor to make it more affordable, an approach emulated by Swatch Group AG, which introduced more economical models. Bolstering their outlook is a perception that Xi’s campaign is losing its immediacy, according to Sun Hung Kai Financial Ltd.

“Anti-corruption remains a concern to those stocks, but it’s no longer a top concern," said Kenny Wen, a strategist at Sun Hung Kai Financial in Hong Kong. Demand from the mass market has given these industries a “new growth engine," he said.

Reversal of fortunes

It’s easy to see why investors are optimistic. Macau’s casino revenue growth jumped 18% in March, the fastest pace in eight months, as both high rollers and leisure gamblers flocked to the former Portuguese enclave. Kweichow Moutai said in February it expected first-quarter net income to climb about 16% to 5.7 billion yuan ($826.4m).

Such a turnaround is remarkable given the pressures that affected the industries near the start of Xi’s presidency. Macau gambling revenue fell every month for more than two years straight beginning in mid-2014, a stretch that included a record 49% plunge in February 2015. This helped drag shares of companies such as Galaxy Entertainment Group Ltd and Sands China Ltd down more than 65% from their peak.

The crackdown on graft equally reverberated through the alcohol industry. Five years ago, government-related sales accounted for about 70% of the total at premium spirits distillers Kweichow Moutai, Wuliangye Yibin Co. and Luzhou Laojiao Co., according to Sanford C Bernstein & Co. That’s fallen to no more than 10%, said Hong Kong-based Bernstein analyst Euan McLeish, citing meetings with the companies’ management.

“The structure of demand has fundamentally changed," said McLeish. “What has become increasingly apparent is that there is underlying demand from individuals. That’s really why the interest in those stocks picked up so much."

The BI Macau/China Gaming Market Competitive Peers gauge rose 0.3% at 9:36am local time, in a sixth day of gains. Kweichow Moutai sipped 0.2%.

There are concerns gains in vice stocks have been too far, too fast. Galaxy has surged 60% in the past 12 months, the third-best performance on Hong Kong’s Hang Seng Index. Its shares trade at 26 times projected earnings, 42% above its five-year average. Kweichow Moutai and Wuliangye have gained more than 50% in that time, five times the pace of China’s CSI 300 Index.

“Casino stocks have almost fully priced in an industry recovery in 2017 so shares may end the year roughly unchanged," said Daniel So, Kong Kong-based strategist with CMB International Securities Ltd.

And Xi’s drive to clean up official corruption hasn’t gone away, even if investors are less worried about the impact as the campaign enters its fifth year. About 415,000 officials were punished in 2016, a 23% increase from the previous year, according to government statistics. At least 120 officials at the vice-ministerial rank or above have been among those ensnared, including Zhou Yongkang, the country’s former security chief, and Ling Jihua, the former chief of staff to Xi’s predecessor.

Xiang Junbo, chairman of the country’s insurance regulator, became the latest senior official to come under the spotlight. Xiang, formerly head of Agricultural Bank of China Ltd, is under investigation on suspicion of severe disciplinary violations, according to a government statement posted on Sunday that didn’t give further details of the probe.